Tuesday, August 29, 2006
New Law to Promote Exploration In Argentina
There is a rumor that a new law is working its way through the Argentina congress, intended to promote exploration and production in basins designated "under-explored or non-productive". I have seen only a preliminary summary of the law, so there will probably be some changes during the legislative process. However, President Kirchner wants it passed, so it will be.
The law will apply to all provinces adjoining the continental shelf. Some of the features of the law will be:
1.) It will apply to areas where no exploration or development permits have been issued.
2.) The provinces will control the sales of permits.
3.) Companies must associate with ENARSA, the federal energy company to receive the benefits of the law. If ENARSA opts out, this does not apply.
4.) Permits for areas adjoing permitted areas will be issued to the permit holder if it can demonstrate geological continuity, if rights of 3rd parties are not infringed.
5.) Various tax breaks including exemption from import taxes on capital goods, exemption from minimum income tax, VAT reductions, and others, will be granted to companies under this law.
6.) There will also be incentives for companies currently operating in certain areas.
These provisions should make exploration in high risk areas more attractive.
The law will apply to all provinces adjoining the continental shelf. Some of the features of the law will be:
1.) It will apply to areas where no exploration or development permits have been issued.
2.) The provinces will control the sales of permits.
3.) Companies must associate with ENARSA, the federal energy company to receive the benefits of the law. If ENARSA opts out, this does not apply.
4.) Permits for areas adjoing permitted areas will be issued to the permit holder if it can demonstrate geological continuity, if rights of 3rd parties are not infringed.
5.) Various tax breaks including exemption from import taxes on capital goods, exemption from minimum income tax, VAT reductions, and others, will be granted to companies under this law.
6.) There will also be incentives for companies currently operating in certain areas.
These provisions should make exploration in high risk areas more attractive.
